Wednesday, September 12, 2007

Luck is just the product of many other entrepreneurial qualities, such as: boldness; inventiveness; motivation; honor; and leadership. Think about this the next time you feel 'lucky,' or are tempted to dismiss someone else's success as 'lucky.' – Founder Ursula Schwuttke, in the conclusion to her earlier post, Risk Everything .

Creator of audio 'banner ad' network dials in $8.1 million for expansion as it awaits the dawn of advertising-supported mobile phone calls. by Ken Schachter

VoodooVox, whose system for inserting audio advertising into phone calls could become the foundation for free cellular service, has landed $8.1 million in capital from a stable of blue-chip venture capitalists, the company said on Tuesday. The series D round was led by Softbank Capital with participation from prior investors Apax Partners, Village Ventures, and Steamboat Ventures, Disney's venture capital arm. As technology giants such as Apple, Google, and Microsoft extend their franchises to mobile devices, voice has become a new flashpoint in the battle for audiences and profit. And the battle is clearly on: Apple has raised its flag on the mobile map with its new iPhone. Google has launched an experimental free telephone search service and is expected to roll out its own "Gphone" or a specification that would allow others to create one. In March, Microsoft, whose mobile operating system already resides on some phones, acquired voice search provider TellMe Networks in a deal estimated at $800 million.

Wednesday, September 05, 2007

One of the great features of Facebook was privacy. You could be assured that what was in Facebook remained in Facebook. However, that illusion might be ending soon.

Tonight, Facebook launches a "public listing search" which allows anyone to search for a specific person. The company says that the information being revealed through these listings is minimal and much less than the information available to someone logged into the Facebook network.

A public search listing provides, at most, the name and profile picture of any Facebook member that has their search privacy settings set to "Everyone." It will show less information about a person than results of a search performed by someone logged in to Facebook. We wanted to give people who had never come to Facebook, or who are not currently registered, the opportunity to discover their friends who are on Facebook.

This is just one reminder of how radically life has changed in the last 100 years. At least in the developed world, we have moved from a life of subsistence to a life of luxury.

The rest of the Case and Paxson paper, titled "Stature and Status: Height, Ability, and Labor Market Outcomes," is interesting, too. Dubner tangentially mentioned this paper in a post a while back, but I think it deserves even more discussion.

It is well documented that tall people tend to hold high-status jobs and earn high wages. There are many possible explanations for this: height is a useful job attribute for some reason; other people mistakenly think tall people are more intelligent than they really are; being tall in high school gives you the confidence to succeed in the work force; etc.

Case and Paxson suggest a completely new explanation for the link between height and high wages: taller people earn more because they are smarter on average. They document that, as early as age three (before schooling has had a chance to play a role), taller children perform significantly better on cognitive tests. These higher scores persist through childhood. I find their evidence pretty convincing — though this is not good news for my four year old son, who is currently in the 5th percentile for height, just like I was at his age.

It is not often that someone tackles a commonly-researched problem and is nonetheless able to offer a new and convincing alternative explanation. I offer them the highest compliment I can think of: I wish I had thought of that!

I have been working at a small California software startup for the past 10 months. Approximately two months before I joined, the company obtained 8 million in venture capital. In the past 10 months, I've seen 4 million of that burned away to little effect; the company size shrink from 25 people to 7; and the entire management layer replaced, from CEO to team lead; I've seen 4 valuable and skilled hackers leave of their own accord as a direct result of personality conflicts, and have seen other workers laid off; the first version of the software failed completely, and a second attempt is underway, launching in September.

This is a brief, anonymous post about some of what I have noticed during my time here. I come from a technical background, and am strongly interested in startups. I joined my present company seeking to experience the fabled startup life. These observations come from my present company, mainly regarding the management of the startup. My current job is the first startup I've worked for after my time as a comp.sci undergrad, then research student at various labs.

My notes comes from my experience in a single startup, a very small sample pool. I don't pretend what I write applies to all people or startups, and I would love to hear any thoughts or feedback about these ideas. No doubt my own personal biases come through in all of these notes, I'd love to have them pointed out.

My position: I started out in the company doing web development (JS, CSS, HTML). As the then-server-team left, I gradually took over the bulk of backend duties. I have installed and maintained the company's Linux app and database server clusters; Amazon EC2/S3 integration; and its RIA backend/event model/integration. I daily program in Java, Actionscript, Ruby, and Javascript; occasionally in a few others. I consider myself a skilled hacker, and I believe those who work with me would agree.

Observations at a Startup

Some people will just get something done; other arrange a time for the team to discuss it.

Losing employees is a large productivity drain on the remaining employees. Morale is vital.

Venture Capitalists will take a heavy hand in corporate affairs, replace people often, without ever having met the development team, or understanding the effect on morale.

Be wary of marketing people who don't back up their recomendations or plans with numerical evidence. The marketing industry is a hive of snake-oil sellers, and it rubs off on nearly everyone involved.

Patents are primarily marketing. Venture capitalists like to talk about them.

If a CEO is too cheerleader-like, employees will stop taking him or her seriously. If there are problems, the development team wants to hear about them, hear viable solutions, and walk out of the meeting feeling inspired. That's a tough job, but it what a CEO is paid to do.

Management will talk about loyalty, but freely fire people; loyalty is supposedly valued, but never specially rewarded, leading to heavy skepticism of management whenever the word is used.

Managers are under high pressure for deadlines; especially if they have no technical abilities, and thus have no control over the situation. Having no control always, in any situaion, will result in heavy stress, and likely a resulting interference in technical matters they don't fully understand, and lead to anger. Hackers should understand this, and especially managers themselves should. I've personally seen such behaviour result in two good hackers leaving a small, 6-person development team company.

Good leaders must be emotionally stable at deadlines. They cannot ever act panicky or lash out at team members without seriously harming the productivity of the team. They should be serious and positive; off-hand comments that insult people will be remembered, and I've seen repercussions happen after six months. Everything has a cost.

I've come to believe any leader of a technical project should have a technical role in the product. As in, writes code.

A CEO or management officer without technical abilities should never hire a technical manager because of his supposed technical abilities. Ask the development team for advice.

Anyone bullshitting about technical abilities they don't have may gain temporary status points; a month later it will earn you contempt from everyone who knows what they are doing. If you don't have a technical background in something, don't try to pretend.

Beer is an underrated tool in software development. The after work beers have gone a long way in maintaining team morale.

Having an off-site CEO is a bad idea in a small startup. Try your damnest not to create a management vs. development dichotomy -- something that is all to easily done. It hurts everyone involved.

Even technically strong people don't necessarily work efficiently. I've seen people who are technically excellent, but don't focus on the right problems, and get less done because of it.

People who read a lot of books, both fiction and non-fiction, are usually very good at whatever they do.

Dedicated job titles lead to hands-off attitudes, and often resentment.

Good hackers won't put up with most of the above, and leave. The good hackers who don't leave will lose enthusiasm and trust in the company, and be far more likely to leave in the future.

People who are good at the Unix command line are worth their weight in gold. Not Gnome users, true command line hackers who understand grep, awk, Perl, etc, and how to tie them together and get things done.

Positioning a product requires a pyramid of messages from lengthy proof statements at the base to a product name or logo at the tip. The messages at the top of the pyramid are used to communicate the product essentials when the message receiver has almost no time, e.g. the name of your product on the package when the product sits on a crowded shelf. The messages at the bottom are used when the receiver has more time, for example a venture capitalist reading a business plan.

Just below the top is the elevator story. This is the 2-sentence, 15-second story about your product that you would use if you happened by chance to be in the elevator with a VP or VC who was in a position to fund the next stage of your project and you only had a very short time to get your message out.

For this deliverable, you will create a 2-sentence elevator pitch for your product using the method described in "Crossing the Chasm" by Geoffrey A. Moore. Moore's method is very structured, but surprisingly effective. Please follow exactly for this deliverable.

The essence of the story is to answer five questions: (1) who is the product aimed at? (customer segment), (2) what problem does it solve? (problem), (3) what category of product is it? (category), (4) what/who is the competition? (competition), and (5) what is the key differentiator? (differentiation).

The pitch is set up in this order using the trigger words on the left:

For:

Target customers

Who:

Need or opportunity or problem

The:

Product/Service name

Is A:

Product category

That:

Key benefits/reason to buy

Unlike:

Primary competitive alternative

We:

Primary differentiation

Here is an example if we were pitching the new products course to prospective students.

For:

engineering and business students

Who:

want to become product development leaders

The:

New Product Design and Business Development Program

Is A:

nine month course

That:

takes teams of engineering and business students through a real-life, comprehensive product development process working with a client company to create a working prototype and a comprehensive business plan

Unlike:

design courses in the engineering school and marketing courses in the business school

We:

offer the opportunity to work on both engineering and business tasks with teams that combine engineering and business students, and the chance to work on a real product that is important to the client company.

Here's what this elevatory story looks like in deliverable form

For engineering and business students who want to become product developmentleaders, the New Product Design and Business Development Program is a nine month course that takes teams of engineering and business students through a real-life, comprehensive product development process working with a client company to create a working prototype and a comprehensive business plan. Unlike design courses in the engineering school and marketing courses in the business school, we offer the opportunity to work on both engineering and business tasks with teams that combine engineering and business students, and the chance to work on a real product that is important to the client company.

Or, here is an example for a consumer product company

For professionals who need access to their information while on the go, Palm Computing is a technology company that provides hand held devices for mobile information access. Unlike laptop computers companies, our products are low-cost, compact and easy to use.

Notes:

The elevator story is two sentences, no more and no less. The start of the second sentence is "Unlike".

The key benefits and primary differentiators should reflect the key value proposition for the target customer. Put yourself in the customer's head and list what will influence their adopt or purchase decision.

For the last phrase, rather than "we", you may use "our product" or the product name.

Suggestion: Have the company review your elevator story before delivering to class. And, have every person on the team memorize the elevator story.

Monday, September 03, 2007

Writing Tight: Why Tiny Business Plans Are Best

Over the course of the past ten years, I must have been involved in the writing or reviewing of 12 dozen business plans, or more. I shudder to think at the hours I have spent blathering on in some Word doc about the purported benefits of some feature in a long list of features, or the reasons why some competitor would never, ever catch up to my company's awesome technology.

A recent survey by Inc. magazine shows that less that half of new companies have formal business plans (oh, and by the way, start with limited funds, a subject for another post). No surprise that modern, agile companies might jettison mindless time-wasting documentation in favor of spending more time on the actual business of business. But I think the time invested is well spent if it leads to the management team getting zoned in, and agreeing on what is important for the business and what isn't.

As you can tell from my tone, I have grown somewhat disenchanted with much of the overkill that surrounds business plans; however, I think that a certain approach to business plans can still be valid and helpful. And, given the demands of angels and VCs, entrepreneurs will have to continue to produce business plans, no matter what their views on them may be.

The Ten Page Business Plan

My approach is simple: write a ten page business plan. In ten pages you have enough room to get to the heart of the business: the product, market, competitors, and how it will grow and make money. Even enough room for an abbreviated consolidation of the financials.

But there is no room in ten pages for flowery superlatives, or run-on sentences, or rambling marketing descriptions that blur into unsupported dreamscapes. There is only enough room for the stripped down essentials of the business.

For those of us reading business plans, this is all good news. Bios are truncated to the absolute minimum, so we don't have to read the heart-warming story of a founder's Phi Beta Kappa ceremony, or the epiphany when the company's president and CTO took a two week raft trip down the Zambezi river.

Depending on what is put into those ten pages, we have a document that provides the key facts about the business, and a capsule summary of what is going on in the heads of management.

For those writing this sort of business plan, however, it can be quite difficult. Most people, no matter how intelligent or educated, do not approach writing with the rigor that this sort of writing calls for, and writing a ten page plan that is effective, clear, and compelling is at least twice as hard as writing a bloated, rambling, and superlative-laden 50 page plan.

Here's the outline for the Tiny Business Plan that I use with many of my clients and companies:

Executive Summary -- 1 page

About The Business -- includes company legal status, history, and trimmed-to-the-bone bios of the management team -- 1 page

The Product (or Service) -- the description and value proposition of the company's product or services -- 2 pages

Market and Competition -- description, size, and trends in the market; and trimmed-to-the-bone description of competitors -- 2 pages

Technology (or Processes) -- A condensed overview of the technology that underlies the product (or service). (Note: I believe that tech companies need another docuemnt, geared for techies, that details the product's design, status, and proeduct roadmap in detail, as well.) -- 1 page

Sales and Marketing -- How are people going to find out about the product/service, how do you engage with them to get them to pay for it, and how much does it cost? -- 2 pages

Financials -- A condensed description of the companies finances, especially with regard to sources and uses of cash. (Note: the company will need more in depth financials, as well, but they should be represented in different formats, not in a business plan.) -- 1 page

The problem with getting a ten page plan done is that people don't want to approach writing with constraints: they want to be free-form, basically writing whatever comes to mind until they run out of things to say. The reality is that in a business plan you should only address critical things, and then you should say just enough to make your case, and no more.

For each section, I work with my clients to create the topic sentences of the few paragraphs that will exist in the final document. We then focus our discussion on what those sentences are, what they state, and what is left out. Only after this is resolved do we descend into writing the complete paragraphs. Perhaps it is no surprise that the initial arguing is hard, but once it has been accomplished, writing the actual paragraphs is straightforward (although bloat always seems to creep in).

Contrasted with the alternatives, the ten page approach focuses the attention of the management team on deciding what is central and what isn't. In many situations where a longer format is being used, I have witnessed very cursory discussion at the outset, as if everyone involved somehow organically knows what is important and what isn't. This is often followed by a parceling out of various sections of the document to different people: the CTO should write the technology section, the marketing guy will write about the market, and so on. This leads to a very uneven document, and often a general mismatch with regard to what is critical.

I strongly recommend the ten page technique, and the accompanying collaborative style. Candidly, I am writing this précis about it because I am involved in the development of several business plans at this point, with several groups, and I am hoping to head off multiple attacks of the "business plan blah, blah, blahs" before they happen. Ultimately, the time invested in a ten page plan is not necessarily shorter than in creating a longer document, despite the size. But the way that time is invested is vastly different, and that makes all the difference.

Sunday, September 02, 2007

The service of Vixy.net is free although they do request that users make donations through PayPal to keep the site running and to pay for costs occured by keeping the site up and free. This site basically operates in the same fashion that the others of its kind do, however on the site it states that because of the compressed domain transcoder technology it uses there is less lost in the download of the video than if you were to use other sites utilizing different technology. The site can transform the videos into five different formats depending on what computer the user is on and what they want to download the video for, you can download to AVI, MOV, mp4, mp3 and 3GP.

If you got excited eons ago when the old Macs came out with the "Stickies" feature and promptly peppered your screen with little reminders, you might have a similar reaction to the new webpage-based note system, stickis. Basically, stickis is an amped-up version of "Stickies" which allows you to write and view notes which can be posted on any page on the internet. These powerful notes can hold literally any type of web content (text, images, video, etc) and can be made public or private. Public notes are only visible on the stickis website and the site the note links to, whereas private ones are only visible to you and the friends you allow to view them. You can build a network of friends by inviting the ones you already have via email, or by making a new connection through the stickis site (just add the person to your network). Site registration and the toolbar download are free (make sure to install the toolbar or you won't be able to enjoy all the site's features).

Are you sick of posting URLs in emails only to have it break when sent causing the recipient to have to cut and paste it back together? Then you've come to the right place. By entering in a URL in the text field below, we will create a tiny URL that will not break in email postings and never expires.